Duratex - 3rd Quarter 2004

transcript

3rd Quarter of 2004

November/2004

www.duratex.com.br

Strategic Management and Outstanding Performance

Strategic positioning and advantages given the favorable moment

CAPEX with accelerated return

Technology, product innovation and recognized brand names

Presence in new markets

Financial strength focused in creating value

Commitment with better Corporate Governance practices

Business Segments

HardboardParticle BoardMDF/HDF/SDFLaminate FlooringCeiling and Wall Paneling

Metal FittingsVitreous ChinaAccessories

Competitive Advantages

Strong Brand Names - Deca and Hydra

Market Leadership, with predominance in

higher end products

Active Policy in Developing new Products

Continued Merchandizing Activity

Leadership – Market Share

Diversified Product Line

Self-sufficiency in Wood Supply

Ecologic and environmental aspects

- ISO 14.001 and Green Label

Net Revenues Breakdown

Net Revenues (Jan – Sep / 2004)

Vitreous China10%

Hardboard 26%

Particle Board 14%

Inter D+ 1%Laminate Flooring 7%

Metal Fittings 22%

MDF/HDF/SDF 20%

Wood Division 68%

Deca Division 32%5

Countrywide Presence

Distribution Channel

Wood Deca

Retail24%

Furniture Makers

Technical Sales 6%

Other6%

Wholesale 14%

Civil Construction 7%

Home Centers18%

Other 2%B2B + Telemktgs 3%

Civil Construction6% Retail

Competitive and Opportunistic CAPEX

Highlights 2000 - 2004

New MDF / HDF/ SDF lineParticle BoardNew Low Pressure Coating LineCut-to-Size SawAutomate Production Processes

(Deca)Expansion of Vitreous China Unit –

Two new kilnsAcquisition of Timberland

MDF/HDF/SDF Unit - Botucatu/SPAutomated Assembling Line –Metal Fittings

New kiln – production capacity of 960 thousand pieces/year

Cut-to-Size Saw

Capital Expeditures Plan

CAPEX & EBITDA (R$ M)

139,4138,965,474,1

224,6210,4187,5199,4

1998 1999 2000 2001 2002 2003 9m04 *

CAPEX * EBITDA annualizedEBITDA9

Growth Potential

Industrial Capacity & Occupancy Rate

Jan Jan –– Sep/2004Sep/2004September/2004

360.000 m3/year360.000 m3/year 97,297,2%%88,0%Hardboard

500.000 m3/year500.000 m3/year

71,9% 83,1%83,1%Particle Board

80,9%80,9%71,5%640.000 m3/year640.000 m3/year MDF/HDF/SDF

14.400 K pieces/year14.400 K

pieces/year 81,1%81,1%Metal Fittings

3.240 K pieces/year3.240 K

pieces/year83,4%83,4%

Vitreous China

Investments with accelerated return

Technology, product innovations and recognized brand names

Innovative Products

Release of New Products

2000 8 4 16 17 52001 33 18 14 15 302002 16 24 41 53 322003 14 14 64 21 12Jan-Sep/04 6 4 13 43 36Total 77 64 148 149 115

Hardboard Particle BoardMDF/HDF/SDF

Durafloor/Durawall Metal FittingsVitreous

Technological Innovations that allows the development of more value added products

Release of New Products - Deca

WashbasinBasin

Spin LineQuadratta Line

Link Line - Suspended

Chromotherapy Showers Lavatory – Slim Line

Release of New Products - Wood

Durafloor – StudioDurafloor – Pro

Durafloor – Home

Kitchen – MDF Panels Durawall – Sample

Flexibility to New Markets

Exports (US$M)

33,631,2

+ 24,4 %

9m01 9m02 9m03 9m04

Highlights (Jan – Sep / 2004)

Exports

DECA 9%

WOOD91% Metal Fittings

3%VitreousChina

MDF/HDF/SDF22%

Hardboard60%

Laminate Flooring3%

INTER D+6%

Export Markets

United States 44%

Europe 21%

Asia / Middle East 18%

South / Central America 13%

Others 4%17

Structured Projects

Furniture - Vitreous China

9 months Sales (in US$)

2004: 2.422 k

2003: 443 k

Clients: Holland, Mexico, South

Africa and Middle East

Showroom (Jundiaí/SP)

Area: 2.000 m²

Product Line: 400 items

9 months Sales (in US$)

2004: 2.486 k

2003: 1.326 k

Fairs: Bolivia, England, Portugal,

Mexico, New Zealand and U.S.

Beginning of shipments to the U.S.

Development of 30 products

+ 446% + 87 %

Consolidated Income Statement (Jan - Sep)

2004 2003 HA%NET REVENUES 883,4 710,4 24%COGS (488,9) (409,8)Depreciation/Amortization/Depletion (52,8) (41,6)GROSS PROFIT 341,7 259,0 32%% Gross Margin 38,7% 36,5%

OPERATING PROFIT BEFORE FINANC RESULT 184,4 115,6 60%Financial Result (40,8) (46,8)OPERATING PROFIT 143,6 68,8 109%NET INCOME 92,7 41,6 123%% Net Margin 10,5% 5,9%

(R$ Million)

Performance (Jan - Sep)

(R$ Million)Net Revenues Gross Profit

2003 2004

+ 24,3% + 31,9%

+ 123,1%

2003 2004

+ 50,9% EBITDA

2003 2004 21

Net Income

Quarterly Performance (R$ Million)

3Q04 2Q04 1Q04 4Q03 3Q03

Shipments

Wood (in 1.000 m³) 280,0 271,7 241,2 252,9 259,3

Deca (in million items) 3,7 3,4 3,3 3,5 3,4

Net Revenues 331,4 301,6 250,3 279,2 264,4

COGS 189,6 185,6 166,5 178,2 165,6

Gross Profit 141,9 116,0 83,8 101,0 98,8

Gross Margin 42,8% 38,5% 33,5% 36,2% 37,4%

Operating Result 80,3 68,2 35,9 50,3 47,3

EBITDA 99,4 87,7 53,7 65,2 61,3

EBITDA Margin 30,0% 29,1% 21,5% 23,4% 23,2%

Net Income 43,6 37,8 11,3 22,5 13,4

ROE (annualized) 18,7% 16,8% 5,0% 9,9% 5,9% 22

Net Revenues Gross Profit

EBITDA Net Income

+ 43,6%

2003 2004

+ 25,4%

Third Quarter Performance

(R$ Million)

+ 225,4

2003 2004

+ 62,2%

2003 2004 23

10,59,810,413,314,513,6

2001 2002 2003 9m02 9m03 9m04

652,6651,5

2001 2002 2003 9m02 9m03 9m04

Shipments

In 1.000 m³

In million items

Increasing Revenues

Net Revenues (R$ Million)

883,4710,4

989,6866,9785,3

2001 2002 2003 9m02 9m03 9m04

CAGR: 12,3%

+ 24,3%

EBITDA (R$ Million)

Evolution in Operating Cash Generation

159,5149,9

224,7210,4187,5

2001 2002 2003 9m02 9m03 9m04

+ 50,9

%CAGR: 9,5%

Performance per Division

EBITDA (R$M) & Margin (%)

83,773,6

36,348,1

36,4%34,9%

22,2%25,4%24,7%

3Q03 4Q03 1Q04 2Q04 3Q04

17,5 16,7 17,414,1 15,7

15,4%15,4%

19,9%18,9%20,1%

3Q03 4Q03 1Q04 2Q04 3Q04

Expressive Improvement in Returns

Equity (R$ Million) & ROE (%)

993,5936,6905,1864,1849,7

614,412,6%

6,8%7,9%6,0%

1999 2000 2001 2002 2003 9m04 *

Equity (R$ M) ROE (%) * ROE Annualized

Total Debt & Amortization Schedule (as of Sep / 2004)

Amortization Schedule

157,991,8

Debt 2004 2005 2006 2007 2008 & Beyond

Domestic Currency

ForeignCurrency

TOTAL DEBT 567,9

Net Debt / Equity 40,1%Net Debt / EBITDA * 1,25

* EBITDA Annualized

Cash R$ 164,9 MNet Debt R$ 402,9M

(R$ Million)

Statutory Changes and Extraordinary Dividend

Extinction of the Beneficiary Parts (BPs), with an outcome better than market

expectations

Increase of the mandatory dividend from 25% to 30% of the Adjusted Net Income

Termination the priority dividend on capital

Distribution of an extraordinary dividend of R$ 1,30 / thousand shares

Conditions for the Company to join BOVESPA´s Level I of differentiated practices of Corporate Governance

Extinction of the Beneficiary Parts

Present Value R$ 160 million

R$ 143 million

R$ 200 million

R$ 130 million

R$ 185 million

Gradual Phase Out Scheme % of Net Income Distributed to BP holders

2004 7,5%2005 5,0%2006 2,5%2007 0,0%

Increasing Dividends (R$M)

Average Pay-Out from 1995 to 2003: 38,6%

25,724,623,621,515,115,014,7

11,28,7

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Extraordinary

Dividend

1st Semester

Dividend

2nd Semester

Commitment with Capital Market

Corporate Governance Extinction of the Beneficiary Parts (BPs)

80% Tag-Along Rights to the Preferred Stockholders

Transparency and Communication:

Annual Report of 2003 – Top 20 Listed

Quarterly Results Presentation - Conference Call and Broadcast via Internet

Institutional Website – 104.000 accesses, 45% more than during 2003

Quarterly Release – “Fact Sheet”

APIMEC Annual Presentation – 18th Consecutive Presentation

Periodic Road-Shows

Improvement in Stock’s Liquidy

Preferred Stock Performance

During the first nine months of the year, Duratex preferred shares have reported an

appreciation of 44%, representing a turnover of 3,6 billion shares worth R$ 301 million.

Avg. daily Number of Trades and Avg. daily Financial Volume

257 19 16

3971.087 1.311

2002 2003 2004 - beforeRelevant Fact

2004 - afterRel. Fact until Sep/30

Avg. daily Financial Volume(R$ 1.000)

Avg. daily Number of Trades

Improvement in Stock’s Liquidy

Duratex Preferred Share X Stock Indexes – 100 BASE – 12/30/2003

dec/03jan/04

feb/04mar/04

apr/04may/04

jun/04jul/04

aug/04sep/04

Relevant Fact17/Aug/04

DURA4 – R$ 96,00

DURATEX IBOVESPA IBX FGV 100 36

3rd Quarter of 2004

November/2004

www.duratex.com.br

Additional Information

Duratex S.A.

Free Float

Number of Shares: 11.782.716.987

Common: 37%

Preferred: 63% (80% Tag-Along Rights)

Market Cap. in Nov/10: US$ 552,1 M

Pension Funds22,7%

Others24,4%

Itaúsa24,4%

ForeignInvestors

28,4% Treasury0,1%

Preferred Shareholders´Structure – Oct/04

Performance (Jan – Sep / 2004)

Financial Performance per Division (R$ M)

(R$M) VA% (R$M) VA% (R$M) VA%

Net Revenues 603,5 100% 279,9 100% 883,4 100%

COGS (318,9) 53% (170,0) 61% (488,9) 55%

Depr/Amort/Depl. (38,8) 6% (14,0) 5% (52,8) 6%

Gross Profit 245,8 41% 95,9 34% 341,7 39%

EBITDA 9m2004 193,6 32% 47,2 17% 240,8 27%

EBITDA 9m2003 118,9 25% 40,6 17% 159,5 22%

Wood Division Deca Division Consolidated

GOGS Breakdown

Performance (Jan – Sep / 2004)

Wood Deca

Work Force37%

Electric Power 4%

Depreciation 8%

Raw Materials48%

Fuel 3%Depreciation 7%

Work Force15%

Wood17%

Raw Materials49%

Fuel 5%

Electric Power 7%

2004 2003

NET INCOME 92,7 41,6

Depreciation/Amortization/Depletion 56,4 43,9

Interest and FX Variation 28,3 27,6

Provisions 16,6 16,5

SUB-TOTAL 194,0 129,6

Investments in Working Capital (80,4) (56,8)

OPERATING CASH FLOW 113,6 72,8

Consolidated Operating Cash-Flow Statement (R$ M)

Performance (Jan – Sep)

3rd Quarter of 2004

November/2004

www.duratex.com.br

Duratex - 3rd Quarter 2004

Investor Relations